Tories’ CPO reforms ‘could face legal challenge’

Tory plans to allow councils to seize land using compulsory purchase powers at below “market value” for social housing could face legal challenge, experts have warned. The “radical” proposals to reform CPO rules to allow councils to buy brownfield land and pocket sites more cheaply is set to be part of the Conservative election manifesto and implemented in order to build a “new generation of social housing” if Theresa May is re-elected on 8 June. However, the industry has warned that the policy would face legal action from landowners. “Reversing the general principle that a landowner is entitled to be fully compensated for the loss of his or her land will meet stiff resistance and significant legal challenge,” said Colin Cottage, partner and head of regeneration and infrastructure at Glenny. He added: “It would signal a radical move away from the current system of compulsory purchase, which is designed to protect people and their property by ensuring landowners have the right to fair compensation.” More active CPO powers The housing white paper, published in February, had already proposed more active use of CPO powers to promote development on stalled sites for housing, as well as piloting land value-capture ideas. However, the latest proposal suggests that land could be confiscated at less than market value. In a statement, the Conservative Party said: “At the moment, councils must purchase land at ‘market value’, which includes the price with planning permission, irrespective of whether it has it or not… . Local authorities therefore very rarely use their CPO powers for social housing, leaving derelict buildings in town centres, unused pocket sites and undeveloped industrial sites.” However, Simon Ricketts, partner at planning practice Town Legal, said the assumption that current CPO compensation gives the land owner “the price with planning permission” whether it has it or not, was “plain wrong”. He added: “Nor should the CPO system be blamed as the reason why local authorities haven’t often CPO’d land for social housing. There are some more fundamental issues for authorities, based on their funding and capacity constraints.” Help for councils to build homes The Conservative Party, which has yet to publish its full manifesto, pledged to help councils and housing associations build thousands of council homes linked to a new right to buy for social tenants through funding, new CPO powers and “housebuilding capability” from the Homes and Communities Agency. The proposals would be funded from £1.4bn already set aside for infrastructure spending in the Autumn Statement. British Property Federation policy director Ian Fletcher said: “We welcome the prime minister’s proposals to support the building of new council houses, but the funding available will likely be stretched, given the magnitude of the problem. “The CPO reforms, which would allow councils to obtain land at below market value, must protect landowners by at least giving them a fair share in the value that is created.” The government’s CPO reforms The housing white paper says that government will explore “land pooling” as an alternative to compulsory purchase, where a multi-ownership plot is built on by the local authority and the plots then redistributed to landowners in proportion to the land they originally owned. CPO powers will be made available for local authorities to intervene in stalled sites which have permission and have started but not completed development, the paper says. The Conservative Party’s election pledge 2017 states that local authorities will have new powers to CPO brownfield land and pocket sites for social housing at below market value. To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette